Teda Suez,a Cooperation Model

THE China-Egypt Teda Suez Eco- nomic and Trade Cooperation Zone， or simply Teda Cooperation Zone， is located in Sokhna District of Suez Province， more than 120 kilometers away from Cairo， the capital of Egypt. It is among the second batch of state-level overseas economic and trade cooperation zones approved by the Chinese government. Signboards bearing the phrase “A sign of development” can be seen everywhere in the park， marking the original intention of setting up this economic and trade cooperation zone.

Over the past decade， the Teda Cooperation Zone has developed from a desert into a modern industrial park covering an area of 7.34 square kilometers. It not only fills the void in Egyptian industry， but has also improved the level of industrialization in Egypt. More than this， it has become a model of SinoAfrican and Sino-Egyptian cooperation under the framework of the Belt and Road Initiative （BRI）.

From “Birth” to “Growth”

China-Africa Teda Investment Co.， Ltd.， founded jointly by Tianjin Teda Investment Holding Co.， Ltd. and ChinaAfrica Development Fund Co.， Ltd. （or simply called China-Africa Development Fund）， undertook the construction of the Teda Cooperation Zone in 2008. The Zone is the first overseas economic and trade cooperation zone project invested by the China-Africa Development Fund.

After more than 10 years of development， Teda Cooperation Zone now serves as a good platform for investment cooperation between Chinese and Egyptian enterprises， producing remarkable economic and social benefits. According to Cao Hui， the investment promotion director of the Zone， by the end of 2018， 77 enterprises had settled down in the Zone， with an actual investment of more than US $1 billion， sales of more than US $1 billion， and taxes of over 1 billion Egyptian pounds paid to the host country. They have also provided more than 3，500 local people with jobs.

The leaders of both China and Egypt have paid much attention to this cooperative project. On November 7， 2009， state leaders of the two countries attended the launching ceremony of the Teda Cooperation Zone. The initial development started in an area of 1.34 square kilometers. With a cumulative investment of US $105 million， the construction of all the buildings and facilities within the starting area has been completed. They include a small business incubator with 12 standard workshops， an investment service building， and a comprehensive supporting service center. According to Cao， four leading industries – new building materials， petroleum equipment， high and low voltage equipment and machinery manufacturing – has basical- ly taken shape in the starting area. Such industrial leaders as Jushi Egypt， Famsun Egypt Industry， Sino-Egypt Honghua Petroleum Equipment Co.， Ltd.， and XDEGEMAC High Voltage Electric Equipment Co. are enjoying good development momentum， and their economic benefits are increasing steadily.

On January 21， 2016， during his visit to Egypt， Chinese President Xi Jinping and Egyptian President Abdel Fattah el-Sisi unveiled the nameplate of the expansion project for Teda Cooperation Zone， which covers 6 square kilometers. Cao Hui said that after three years of hard work， including park research and planning， industry research and analysis， infrastructure construction， marketing， and investment promotion， infrastructure construction has been finished and eight enterprises are already on-board. The industrial clusters of the passenger car manufacturers represented by Dayun Motorcycle and new building materials industry represented by Taishan Gypsum are rapidly taking shape. They are attracting the inflow of supporting businesses both upstream and downstream to the Zone， which will greatly promote the economic and trade cooperation between China and Egypt.

According to Cao， the total investment in the expansion phase of the Teda Cooperation Zone is US $230 million. It is expected that about 150-180 enterprises will be attracted to the Zone， with total investment estimated at some US $2 billion， achieving sales of US $8-10 billion， and creating 40，000 job opportunities.

Deepening Sino-Egyptian Cooperation under the BRI Framework

In 2013， China put forward the Belt and Road Initiative to promote its opening-up and cooperation between the countries along the routes. In 2015， the Egyptian government launched the Suez Canal Corridor Area Project and vigorously promoted industrialization in the country. This presented a historic opportunity for China and Egypt to deepen cooperation under the BRI framework.

Egypt responded positively to the BRI and was one of the first countries to join the Asian Infrastructure Investment Bank. In January 2016， during President Xi Jinpings visit to Egypt， the two governments signed the memorandum of understanding on the promotion of the Silk Road Economic Belt and the construction of the 21st Century Mari- time Silk Road. At the same time， the two sides signed a number of bilateral cooperation documents in the fields of electricity， infrastructure construction， economy and trade， energy， finance， aerospace， science and technology， and climate change.

The Northwest Gulf of Suez Economic Zone （SEZONE） is located at the starting point of the planned area for the Suez Canal Corridor Area Project. As a key project of the SEZONE， the Teda Cooperation Zone has become an important platform promoting SinoEgyptian economic and trade coop- eration. In an interview with Xinhua， Mahfuz Taha， vice chairman of the Suez Canal Economic Zone in Egypt， said that the Chinese investment in Egypts Suez Canal Economic Zone has been a success story of the productive ChinaEgypt economic partnership.

The outstanding achievements of the Teda Cooperation Zone have not only brought economic benefits to Egypt， but also improved the technological level of related industries in Egypt and filled the market void across the Middle East and Africa. Cao Hui cited Jushi Egypt as an example， saying that the company， as a high-tech modern enterprise， has not only made outstanding contributions to employment and taxation， but also filled the void in fiberglass production in North Africa， enabling Egypt to become the third largest glass fiber producer in the world after China and the United States.

Famsun Egypt Industry is also a company invested in by a Chinese business group in Teda Cooperation Zone. In cooperation with the China-Africa Development Fund since 2013， Famsun has invested more than US $74 million in Egypt to establish a production base， focusing on warehousing， goods delivery， forage， and aquaculture projects. Ye Shibo， Famsun Egypts deputy general manager， said that his companys warehouse， after being completed and put into operation， will have an annual storage capacity of 4.9 million tons， and will achieve annual sales of 250 million Egyptian pounds. By doing this， it will solve the huge waste caused by insufficient grain storage system in Egypt and other African countries， and will also create some 500 jobs in the region.

Ye said that Famsun Egypt chose the Teda Cooperation Zone for its factory premises because of its location， policy， and supporting facilities. “Under the Belt and Road Initiative， China encourages enterprises to go global to carry out production capacity cooperation， and there are lots of economic and trade cooperation zones promoted by the national and provincial governments. The investment in such economic and trade cooperation zones can enjoy preferential policies of both China and the host country，” he said. In addition， Ye added， the close proximity of Teda Cooperation Zone to the port can help to reduce the cost of inland transportation， while the preferential treatment of duty-free import and export and sales tax in FTA， as well as a line of services covering human resources， government services， logistics， finance， and other supporting and coordinating services are readily available in the Zone.

As a leading enterprise in the global agriculture and animal husbandry equipment industry， according to Ye， Famsun Egypt has been deeply engaged in the Middle East and African market for many years and enjoys broad prospects for development. The company has also paid attention to lo- calization of staffing. The total number of expatriates assigned to the Famsun Egypt offices （Middle East and Africa） as well as its representative offices in other countries is between 60 to 70 people. “Under the guidance of the Belt and Road Initiative， we will promote the common development of different countries with high technology and equipment， and seek to promote peoples happiness，” Ye said.

Teda Experience to Benefit Africa

The Teda Cooperation Zone shares the same idea of training local talents as Fansun Egypt. Cao Hui notes that the Zone has helped to train a good number of excellent industrial park development and construction management personnel for Egypt， and the enterprises entering the Zone have also trained a number of professional technical workers and enterprise managers. In addition to holding various kinds of regular training， Teda Cooperation Zone also makes arrangements for excellent Egyptian staff and managers to visit and study in China in order to improve their level of management and service awareness.

With the advancement of BRI cooperation， the “Teda model” is drawing attention from more BRI participating countries and enterprises. In recent years， China-Africa Teda has been engaged in providing industrial solutions consultancy for the Mombasa Free Trade Zone project of the China Road& Bridge Corporation in Kenya and the Djibouti project of China Merchants Group. It has also participated in feasibility studies on the projects of the Pointe-Noire Special Economic Zone in the Republic of Congo and the Kumasi Industrial Park in Ghana.

According to Cao Hui， China-Africa Teda has also been invited to provide consultancy services for projects such as China Communications Construction Companys Mohammed VI Tech City in Morocco， China Gezhouba Groups industrial park in Clark， Philippines， Benin Seme Podji Industrial Park， and the China–Pakistan Economic Corridor. Various talks and discussions are under way now. Tedas experiences are expected to provide support for more BRI projects.